3 proven strategies to combat the skills shortage
With unemployment low, skilled and experienced staff are becoming harder to find. Combine that with some of the proactive poaching efforts we’re seeing in the market and it’s no wonder that attracting and retaining high performing staff is fast becoming the number 1 concern for accounting and financial advice firms.
The good news is there is no shortage of potential strategies firms can adopt to help protect their workforce capacity and capabilities, but the question is which strategies are going to be the right fit for your organisation? Broadly speaking, strategies to address skill shortages fall into 3 main categories. In this blog, we explore the pros and cons of each.
Strategy 1: Increase labour supply
Poaching staff from other firms is one way to increase labour supply. While this can be an effective way of attracting highly experienced team members, it comes with a significant financial impact. Salaries and bonuses typically need to be well above market rates to entice a non-active candidate from leaving their current position.
Alternatively, firms can recruit underqualified or trainee staff with an understanding that their value will be realised over time with internal training, mentoring and coaching. This strategy does have longer term benefits, but while junior team members are getting up to speed a dip in short term productivity is common.
One strategy that continues to grow in popularity is outsourcing. Tapping into pre-trained and pre-qualified staff offers mid-tier firms a quick and effective way of maintaining productivity and capping costs in a fraction of the time it takes to train new team members. One word of warning here is you need to be mindful that not all outsource providers are able to offer the same level of qualified staff, data protection or quality control, so it’s important to only engage a proven, credible and reliable outsourcing provider.
Strategy 2: Constrain labour growth or increase productivity
Automation is well adopted in the financial services industry because it’s an effective way to improve efficiency, productivity and reduce the need to increase headcount costs. However, even with automation, there will always be an element of human involvement that’s still required.
The adoption of any new software requires a set up and implementation process. In some cases, staff training is also needed to ensure you can realise the automation benefits as quickly as possible. To ensure a smooth transition, it’s also a good idea to appoint an internal ‘champion’ to project manage the implementation within your firm.
A less popular strategy (amongst staff anyway) is to increase working hours. The days of ‘busy periods’ for accountants and financial advisers are long-gone, and sustained overtime can have a detrimental impact on staff morale, motivation, and their loyalty to your firm.
Relocating work offshore, particularly the repetitive, administrative tasks that can’t be managed by automation is an effective way to increase productivity quickly without the need to increase headcount. With the right outsourcing partner, efficiency can be improved by up to 80% and profit margins by up to 50%. This strategy also has a positive impact on your existing team in terms of capacity and morale as they are free to spend more time on high value activities within their usual hours.
Strategy 3: Increase labour costs to retain staff
Given the significant time and cost investment involved in any recruitment process, it is well worth having a retention strategy in place.
Workplace culture is directly linked to employee satisfaction and has a significant impact on your employee retention. The leadership in your firm, mission and values, practices and policies and work environment all influence how an employee feels about your firm. When workplace culture becomes a strategic business goal, you reduce the risk of top performing employees being tempted to jump ship.
In addition to culture, monetary perks can also help drive employee loyalty. Increased salaries and bonuses, equity sharing schemes, retention bonuses, shorter salary review periods and offering targeted performance-based bonuses are all strategies that can all help minimise staff turnover.
In any labour market, but particularly in one where skills shortages can put your business continuity and client satisfaction at risk, taking a proactive approach to protecting your workforce capability and capacity is a must. Often, it’s not one strategy, but instead of combination of strategies that will enable you to reduce the risk of gaps in your client servicing capability and protect your business now and into the future.
Want to know more about outsourcing?
SuperRecords is a trusted outsourcing provider with more than 10 years’ experience supporting firms with SMSF Administration, Business Services, Paraplanning Support and SMSF Audit. To find out more about our cost effective and flexible services or to book a demo, please get in touch.